Published
Tue, Jun 29, 2021, 22:27
- The sector's valuation dropped 54 percent to $3.4 billion last year, according to the IMS Business Report 2021.
An in-depth study by IMS, in partnership with Pioneer DJ and Billboard, has revealed just how badly the pandemic hit the electronic music business.
After almost ten years of growth, the global industry saw its value drop 54 percent to $3.4 billion last year from $7.3 billion in 2019. "The pandemic temporarily set back our industry to a size last seen more than a decade ago," the IMS Business Report 2021 stated.
The impact of lockdowns on live music was the weightiest factor. With more than 200 music festivals across the world canceled or postponed, festivals and clubs lost $3.4 billion in value—a 78 percent annual drop from 2019—the report said. Artist earnings, meanwhile, are expected to plummet by 68 percent.
Another contributing factor was dance music's declining relevance. Revenues of recorded dance music broke $1 billion last year but the share of electronic music within overall recorded music revenues dipped slightly to 11 percent in the US, even as the overall market grew. Moreover, the share of electronic artists on Spotify's Top 200 charts has steadily dropped over time in 16 of 18 countries, according to the study.
Despite these gloomy figures, the report noted several reasons to be optimistic. Aside from virtual events, more opportunities for artists are on the rise as fashion and electronic music increasingly converge. The report pointed to how major labels such as Louis Vuitton, Prada and Chanel are increasingly working with electronic music artists and DJs for soundtracks, commercials and runway shows. Education is also becoming a new revenue stream as artists teach skills on platforms such as MasterClass and Aulart.
Another new growth area is the NFT market. A whopping 76 percent of all of the $50.2 million music NFTs sold in the last year were minted by electronic artists. Earlier this year, researcher Cherie Hu published a document outlining how 150 artists earned $55.7 million from NFTs between June to April last year.
The DJ software and hardware industry boomed as more DJs played (and streamed) at home. The sector's value jumped 23 percent on-year to hit a record high.
The report projects the recovery of festivals and clubs as events gradually resume in several countries. The value of festival tickets sold between March to May of this year is up 123 percent compared to the same period in 2020, with the value of tickets sold in March alone surpassing the whole of 2020 combined. Overall, the report estimates the global live music industry will recover from 75% losses in 2020 to 145-160% growth in 2021/22.
For more data, download the full report here.
